This summer, many students will be taking on summer jobs. However, many are unaware of the tax consequences involved with employment. Additionally, many students fail to establish a savings goal.
For example:
1. Form W-4, Employee’s Withholding Allowance Certificate must be completed. Employers use this form in order to withhold taxes from your paycheck. The IRS website has a useful Withholding Calculator on to assist with completing Form W-4. Visit www.irs.gov.
2. Use the summer job as an opportunity to set a savings goal. The website www.YoungAmericaSaves.org is a very useful tool.
3. Remember that money received from tips are taxable and so are earnings from self-employment.
3. Do your research and find a good a savings account. The website bankrate.com is a great tool for finding the right account to suite your needs.
4. Lastly, parents should try to serve as role model for their children. Setting clear expectations and making the most of your savings will enable your children to follow a good example.